UTILICO EMERGING MARKETS LTD – Interim Unaudited Results To 30 September, 2010 (Excerpt)

Hamilton, Bermuda – 10 December, 2010 - Utilico Emerging Markets Limited (the “Company”; Ticker: UTILEMU.BH) has released unaudited interim results for the six months to 30 September, 2010.

Highlights of results

• UEM’s diluted NAV ordinary share increased by 16.3% to 172.53p
• Revenue earnings per share have risen in the six months by 25.5% to 4.09p
• The Board has declared a dividend of 3.75p
  

CHAIRMAN’S STATEMENT

I am pleased to report that Utilico Emerging Markets Limited’s (“UEM”) diluted net asset value (“NAV”) per ordinary share increased by 16.3% to 172.53p during the period. This was achieved despite most world markets retreating over the six months. The Bloomberg World Index, the S&P 500 Index (both GBP adjusted) and FTSE All-Share Index retreated by 1.1%, 2.4% and 1.5% respectively. The MSCI Emerging Markets Index (GBP adjusted) was up 2.8%.

During the six months UEM remained fully invested. UEM started the period fully drawn on its bank facility and ended the period ungeared. The bank debt was largely repaid through the exercise of the warrants and S shares in August this period. The investment manager has remained confident about the rising levels of economic activity and their positive impact on the emerging markets. However, caution about the wider issues facing the developed economies have resulted in the investment manager and Board continuing to be cautious on gearing.

There continues to be a strong inflow of capital into the emerging economies. Coupled with rising levels of activity, these have both resulted in GDP growth and strong currencies across most emerging markets, so much so that a number of countries have taken steps to address their currency strength.

UEM’s revenue earnings per share have risen in the six months by 25.5% to 4.09p reflecting the underlying progress made by investee companies. There continues to be strong increases in earnings within the investments of the portfolio. The Board has declared a dividend of 3.75p in line with the prior year’s interim dividend. This period’s interim dividend is well covered by the 4.09p earnings per share in contrast to last year’s interim dividend which was not fully covered.

During the six months the warrants and S shares were exercised. This together with wider market uncertainties resulted in the discount on the ordinary shares widening to over 10.0%. The investment manager viewed this as an investment opportunity and UEM bought back both ordinary shares, warrants and S shares on a number of occasions. UEM bought back 7.5m ordinary shares for cancellation at between 130.00p and 150.00p at a total cost of £10.6m. In addition UEM bought back warrants and S shares between 30.00p to 35.00p at a total cost of £4.8m. The warrants and S shares which were exercised raised £23.4m and increased the shares in issue by 23.4m. The net effect of the above over the six months was an increase in the number of shares in issue by 15.9m and a net capital increase of £8.0m.

UEM appointed Westhouse Securities Limited as Nominated Adviser and broker during the period under review. Garth Milne has stepped down from the Board of UEM as a result. Garth has contributed significantly to the Board since its inception and I am pleased he has agreed to continue his involvement as a consultant to UEM. I am delighted Anthony Muh has joined the Board of UEM, as he will clearly add to our abilities as a Board especially with regard to the Asia region.

We remain optimistic about the long term performance of UEM. We continue to see strong evidence of a growing middle class in the developing economies, and this is key to the longer term outlook. Strong earnings performance by our underlying investments means valuations remain attractive.

We continue to be vigilant to the issues facing the sovereign debt markets. Nevertheless we are increasingly of the view that they will not disrupt the long term outlook for the emerging economies.

Alexander Zagoreos
Chairman
9 December 2010

The Directors have declared an interim dividend in respect of the six months to 30 September 2010 of 3.75p per ordinary share payable on 7 January 2011 to shareholders on the register at close of business on 17 December 2010. This interim dividend has not been accrued in the results for the six months to 30 September 2010.

The half-yearly report will be posted to shareholders in mid December 2010. Copies may be obtained during normal business hours from Exchange House, Primrose Street, London EC2A 2NY.

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